Section 227.1 and Director's Liability After the People's Decision - A Clarification from Above?
Date:
December 16 2004
Generally, a corporation’s directors are not personally liable for taxes owed by the corporation. However, one of the major exceptions in the Income Tax Act1 (the ‘‘Act’’) is section 227.1. This provision imposes a personal liability on corporate directors if a corporation fails to deduct or withhold and remit certain taxes to the Canada Revenue Agency (‘‘CRA’’). The Act also provides defences that can be used by a director in respect of his or her personal liability under section 227.1.
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